Correction: A previous version of this article contained incorrect sales city of Boulder finance data. The figures have been corrected below.

Since 1993, when Trader Joe's began opening its small-scale specialty grocery stores outside of its home state of California, the burgeoning chain -- in a casual, yet calculated manner -- hop-scotched its way across the United States.

Trader Joe's skipped over Colorado in its expansion efforts, which have led to the chain operating more than 365 stores in nearly three dozen states.

But the days of Trader Joe's representatives saying Colorado was not in the company's "two-year plan" have ended.

Two weeks ago, Trader Joe's quietly filed paperwork with the Colorado's Secretary of State office to conduct business in the state beginning in April. Sources told the Camera that Boulder will be home to a Trader Joe's -- and one of those sources said the grocer "most likely" will open on the Twenty Ninth Street property.

*States without an operating store or a location noted by Trader Joe's on its website as "coming soon"

Both Trader Joe's and Twenty Ninth Street officials have declined to comment.

Trader Joe's opening a store in Boulder, however, would mean the wildly popular chain is dropping anchor in a saturated grocery field.

"Boulder's the most competitive natural foods market in the country," said Kemper Isely, co-president of the Colorado-based Natural Grocers By Vitamin Cottage, which has a store at 2355 30th St. in Boulder.

The city that churned out multitudes of top-selling natural and organic brands is home to three Whole Foods stores, one Natural Grocers By Vitamin Cottage outlet, one Sunflower Farmers Market, one Sprouts Farmers Market, one Alfalfa's Market and the natural- and organic-focused Lucky's Market -- not to mention King Soopers and Safeway locations featuring bolstered natural products sections.

"It's definitely a bold move for any new food retailer to move into the Boulder market, given how many retailers we have here," said Carlotta Mast, editor-in-chief of the Natural Food Merchandiser, a Boulder-based industry trade publication. "But I think if there were one retailer who could make a successful go of it, it would be Trader Joe's."

Mast and other industry observers point to the grocer cultivating a loyal customer base with its unique offerings; small, "neighborhood" stores; selection of cheap, but easy-on-the-palate, wine (the chain's much-loved "Two-Buck Chuck"); and a high-energy retail environment.

'Affordable indulgences'

That combination has launched the privately held and tight-lipped Trader Joe's into an industry juggernaut.

Various estimates put the privately held grocer at about $8 billion in revenue in 2009. The grocer, which operates stores that average about 12,000 square feet, in all likelihood is now pulling in $10 billion annually, said Bob Goldin, executive vice president of Technomic Inc., a Chicago-based food industry research firm.

In this 2008 photo, a customer departs Trader Joe's in Los Angeles. The wildly popular grocer is expanding to Colorado, and a source told the Camera that includes a store in Boulder -- already a crowded market for grocery stores.
(
Ric Francis
)

Trader Joe's, with an estimated annual growth rate of at least 10 percent, has been a retail phenomenon, Goldin said.

"They open stores; they don't close stores," Goldin said. "They seem to be a very, very successful competitor everywhere they go."

Trader Joe's has accomplished that by building a strong private label brand of "affordable indulgences," he said. The grocer's line includes an assortment of frozen and packaged items such as dark chocolate-covered edamame, kettle corn cookies and "This Fig Walks Into a Bar..." granola bars.

"I think consumers look at it and think, 'I can go and get things that I can't get elsewhere.' The brand has a strong quality perception," he said. "They just seem to turn their customers on."

Another element comes from the ambiance: a sporadic, yet playful tropical theme; Hawaiian shirt-adorned employees; and a Morse code-like bell system, said Phil Lempert, a grocery industry observer known as the "Supermarket Guru."

Limited selection

Trader Joe's biggest drawback, however, is that it can't be everything to everyone.

"It's more of a limited assortment," Lempert said. "You're not going to get some of the products you want there. They don't have Charmin and they don't have Bounty. You might have to augment that shopping."

The whole package, apparently, has helped breed a rabid fan base.

Numerous "Bring Trader Joe's to..." Facebook pages have been created for Trader Joe's-less states and cities throughout the country.

Colorado and Boulder -- where the closest Trader Joe's is more than 300 miles away in Santa Fe, N.M. -- are no exception as a variety of Facebook pages and online petitions were created to lobby the grocer, which frequently landed among residents' top-desired retailers in informal and formal surveys.

Brittany Cirbo, who works in Boulder, said she frequent Trader Joe's stores when business trips took her to California, so a local store would be welcome.

"I think it's great," said Cirbo, 27, as she grabbed a quick bite at the Whole Foods off 28th and Pearl streets in Boulder. "I think it's really good to keep it competitive and Boulder's a really good place. You can see that Whole Foods is always packed. It'll be nice to have a different place."

Drawing away the dollars

For a retailer like Trader Joe's, it comes down to the grocer's "whole proposition," which includes purchasing directly from the manufacturers and shipping the products to the grocer's distribution centers, said Natural Food Merchandiser's Mast.

"They have economies of scale and efficiencies built throughout their business," Mast said of Trader Joe's. "You're always going to compete on price, but for a smaller retail, it's always a danger to only compete on price, because you're never going to win at that game."

Hence, complementing the operational efficiency and unique offerings with "forward-thinking" approaches such as Trader Joe's certifying its products as GMO-free, could help the grocer play well with shoppers in a city like Boulder, she said.

"If they do open up here, they will really up the ante for all the retailers in the area," Mast said.

When Trader Joe's stores have opened in markets where Natural Grocers By Vitamin Cottage operates, the Lakewood-based grocer has witnessed a small draw, but nothing incredibly damaging, Natural Grocers' Isely said.

"I would say that Trader Joe's consumer is probably similar to our consumers, although (Trader Joe's is) not really a natural foods store," Isely said. "... I think that they will have a greater impact on more traditional stores and also Sunflower and Sprouts. Those stores are more crossover stores."

Based on estimates Isely said he's heard that annual sales draw -- estimated to be more than $30 million per store -- could be substantial, especially if Trader Joe's were to sell wine and beer at its Boulder store.

Colorado's liquor laws allow chain stores and grocery retailers to sell beer less than 3.2 percent alcohol by weight, but limit grocers to just one full-strength liquor license for the whole chain. Alfalfa's Market and Whole Foods have opted to have put their one liquor-licensed location in Boulder.

Constant competition

Bo Sharon, owner of Lucky's Market in north Boulder, said he's been impressed at how crowded the Boulder grocery market has become in the past four years.

"We had Sunflower open in 2008 and Sprouts was the next year and then we had Alfalfa's (last year) and now Trader Joe's," he said. "It seems like this constant flow of competition and, knock on wood, I think we all bring different things to the table and apparently can all exist."

Boulder's "food stores" are the third-largest revenue category in Boulder with consumers spending $314 million at grocery stores through November of last year, according to Boulder Finance Department data. Boulder's food stores revenue is just behind the $316 million spent at restaurants and related establishments and the $472 million spent at general retail stores.

A new entrant, however, simply could just displace existing dollars spent at local grocery stores, Sharon said.

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